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FACTSHEET: Energy Department Investments in Biofuels Innovation

July 2, 2012 - 10:00am

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As part of the Obama Administration’s commitments to an all-out, all-of-the-above strategy to develop every source of American energy and reduce our reliance on imported oil, the Energy Department is working to catalyze breakthroughs in innovative biofuel technologies and advance biofuels production at refineries across the country. Rather than sending $1 billion each day overseas for oil imports, we can invest in a growing domestic clean energy economy here in the U.S. At the Energy Department, we are taking a number of steps to develop the next generation of biofuels that can help reduce our dependence on foreign oil, create jobs, support rural communities and protect our air and water.

Commercializing Cost-Competitive Biofuels

Together with our industry partners, the Energy Department has invested in new technologies to help reduce the costs of producing fuel from trees, grasses, and agricultural waste so it can become cost-competitive with gasoline. Over the past ten years, breakthroughs in feedstock logistics, preprocessing and pretreatment; enzyme and fermentation sciences; and catalyst development and process optimization have helped reduce the production cost of cellulosic ethanol by more than $6 per gallon, which – when scaled to a commercially viable level – should produce cost-competitive, fuel-grade ethanol.

In Blair, Nebraska, Novozymes is manufacturing an enzyme that converts the cellulose of various feedstocks – like waste paper, cardboard, wood chips and corn stover – into simple sugars that are then fermented into biofuels. Novozymes received a $28.4 million federal clean energy tax credit to expand its production operations in Blair, which helped leverage an additional $200 million in private investments. The recently inaugurated project is supporting 100 operational jobs, including chemical and electrical engineers and equipment operators, in addition to creating about 400 construction jobs.

In March 2011, President Obama set a goal of breaking ground on at least four commercial-scale cellulosic or advanced bio-refineries over the next two years. In just the past year, four commercial biorefineries – as well as five pilot plants and one demonstration-scale facility – broke ground in the U.S. These projects are the first of over 25 new biorefineries supported by the Department which are expected to break ground over the next three to four years.

Reducing Costs across the Entire Supply Chain

One of the largest costs for an advanced biorefinery comes from harvesting, handling and preprocessing its raw material feedstock – the wood, grass or waste product it converts to fuel. At the Department, we have made pioneering advances to reduce costs and establish best practices across the entire feedstock supply chain. Through these efforts, we have reduced the harvesting, storage, preprocessing, and transportation costs for select corn stover scenarios from $60 per dry ton in 2005 to $35 per dry ton in 2012.

Over the past two years, we have supported five industry partnerships that are now testing prototypes for commercial harvesting equipment that balance the needs of land owners, feedstock suppliers, equipment manufacturers and biorefineries, while reducing costs and achieving greater process efficiencies.

Last year, the Department’s Idaho National Laboratory deployed a user facility to help optimize the processes and technologies required to turn bulky, unstable non-food crops into pellets and other uniform feedstocks for biofuel production. The success of efforts like these is accelerating development of cost-effective, efficient feedstock supply chains that the nation needs to make sure our growing biofuels industry continues to expand, creating jobs and reducing our reliance on imported oil.

Diversifying U.S. Energy Mix with Drop-in Biofuels

Beyond cellulosic ethanol, the Energy Department is developing several ways to make “biocrude” and drop-in fuels that will further diversify our nation’s fuel supply and enhance energy security. These substitutes for diesel, jet fuel and home heating oil will help reduce our reliance on imported oil, replacing oil and diesel products with clean alternatives, grown and processed here in the United States.

To achieve this goal, we are pursuing a portfolio of technical options, including near term opportunities to convert municipal solid waste, wood, and agricultural residues and longer term options from algae. For example, in Luna County, New Mexico, Sapphire Energy is building an algae crude oil demonstration plant that will produce 100 barrels of biocrude per day, or approximately 1 million gallons of fuel capacity on an annual basis. Through the Recovery Act, the project received a $50 million grant from the Energy Department as well as a $54 million loan guarantee from USDA. Since then, the project has secured over $140 million in private investment.

BioEnergy Research Centers -- Catalyzing New Breakthroughs

Since 2007, the Energy Department’s three BioEnergy Research Centers have pursued breakthroughs in biofuel technologies, working to move these discoveries toward commercialization. At the Joint BioEnergy Institute at Lawrence Berkeley National Lab, researchers have engineered a strain of E. coli to produce gasoline-like fuel. In Madison, Wisconsin, research at the Great Lakes BioEnergy Sciences Center has helped isolate an enzyme that produces seed oil, which could be used as a biofuel, while researchers at the BioEnergy Science Center in Oak Ridge, Tennessee, have created new lines of perennial prairie grass that could produce as much as one-third more ethanol than from regular switchgrass. Find information on the Centers’ achievements in biofuel research and innovation HERE.